I didn't realize that any shipping methods stored their shipping method using HTML, so HTML wasn't stripped out. I use v4 now, so I don't have the exact line of code in v3, but the line you are looking for in send_pos.php should look something like this:

Code:
$pdf->addNotes(SHIPPING_OPTION.": ".$tmpt[0][7]."\n\n".PO_PARTIALSHIP_PACKINGLIST."\n");
Try adding this before this line -- it should fix your problem:

Code:
$tmpt[0][7]=strip_tags($tmpt[0][7]); 
$tmpt[0][7]=htmlspecialchars_decode($tmpt[0][7],ENT_QUOTES);
Let me know if that doesn't work. Enjoy!